Penson Worldwide Settlements Limited, a subsidiary of Dallas-based clearing, custody, and settlement services agent Penson Worldwide, have signed an agreement with the Business Architects International (BAI) software firm to add portfolio measurement and modelling, order management and client reporting to the execution, clearing, settlement and custody services the firm currently provides to clients.
The agreement with BAI reflects the ambition of Penson to break into the UK retail investment and wealth management industry, and in particular to attract retail fund managers, stockbrokers, solicitors and IFAs as clients. “Penson can now provide an outsourced front to back office, full service capability for both retail and institutional investment managers,” says the company. ” Portfolio management including performance measurement and modelling, full client valuation and capital gains tax reporting, order management with rebalancing and bulk ordering; order routing and execution; trade confirmation and matching; full cash and stock management; online web access for both correspondents and clients.”
Penson currently offers a Model A service which ranges from full back office outsourcing down to individual CREST sponsored membership. This “New Generation” delivery Model B (Fully Disclosed) service is the culmination of a two-year development program, which has drawn on the group’s market experience as a leading US processor of over 750,000 daily trades on the NYSE/NASDAQ and the integration of their settlement systems together with “Best of Class” European vendors of front office solutions, direct market execution links and specialist Capital Gains Tax providers.
“This is the new generation of end to end investment management, an affordable and lower cost option offering more services than any existing combined internal front to back office system or third party administrator,” says David Wilson, Business Architects UK Director.
The PWSL offering is seen as a competitor to typical retail and private banking back office systems such as Consort, Exact, JHC and Globus. Whilst in the front office Pulse, Wealth Management Software and Advent and Triple A are competitors. The outsource competitors are Pershing’s G2 and Nucleus, and the recently announced Bank of New York/Tilney offering.
According to Dan Son, President of Penson Worldwide, Inc.: “We decided to look at the UK market with a fresh approach and asked fund managers what they really wanted. Clearly, the feedback indicated more sophisticated portfolio measurement and execution at the front. This is a collaboration of best of class financial component vendors in the industry joining forces in the belief that the incumbent service providers have been complacent for too long.”
The new service will be officially launched in January 2003.